The Road to Financial Resilient: Testing Digital Financial Literacy and Saving Behavior

Abstract

The crisis caused by the COVID‑19 pandemic has clearly demonstrated the importance of financial resilience for households. It is necessary as a measure of preparedness for the economic shocks that may arise, especially in connection with the recession problem, which has been increasingly discussed recently. Financial resilience can be formed through resilience-building financial behaviors, including saving behavior. This study investigates the predictors that shape household saving behavior in a digital context by adopting the Theory of Planned Behavior (TPB), i.e., how human behavior is guided. This model also adds digital financial literacy (DFL) as an extension of the TPB. The digital context is taken because of the oblique shift in financial behavior with the rise of Digital Financial Services (DFS) in society. This study used a survey method with a well-structured questionnaire. The reflective measurement was performed using the Partial Least Square Structural Equation Model (PLS-SEM). Analysis was conducted on respondents in Java, Indonesia, to the survey’s screened data (N = 900). The study results show that all predictors influencing household decisions to save include all predictors of TPB and DFL. In the mediating effect, the intention toward saving behavior act as a partial mediating variable on the relationship between exogenous and endogenous variables. This study suggests policymakers, government, and educational institutions provide DFL to households.